The acute-care institution is flourishing—revenue, worker satisfaction as well as quality are up—after it survives bankruptcy and reinvents itself.

Seven years ago, Syracuse, New York’s, Crouse Hospital struggled to survive bankruptcy and was forced to undergo painful budget cuts and layoffs. The air was rife with rumors that central New York’s largest acute-care institution would be broken up or sold outright.

But instead of going under, Crouse chose to reinvent itself. Management brought together employees from all levels and allowed them free rein to remake virtually every aspect of the organization, from refocusing the hospital’s mission to reinventing processes from the ground level to improve efficiency.

The result: Crouse not only regained its status as a regional market leader, but also achieved new heights in economic performance, productivity and quality.

Crouse’s financial resurrection has been impressive. Compared with a $15 million net loss in 2000, Crouse last year had $11 million in net income. And through the first seven months of 2008, the institution earned a net income of $6.2 million, 230 percent of its projected goal—a striking performance in New York state, where most hospitals break even or lose money.

At the same time, the hospital is providing more services to the community. In 2007, it handled 55,000 emergency services visits and discharged 22,971 patients, both tops in the region. Crouse spokesman Bob Allen notes that families come from as far as 200 miles away to take advantage of Crouse’s neonatal intensive care unit, which has regained its stature as one of the finest in the nation. The hospital has improved quality at all levels—streamlining its pharmacy system, for example, to reduce the time it takes for the first dose of antibiotics to reach a patient from 3.9 hours to just 1.9 hours, about twice as fast as the industry average.

Additionally, Crouse has achieved remarkable improvement in its relationship with its employees, according to key metrics. Annualized workforce turnover has declined from a high of 49 percent in 2001, before the hospital’s culture change, to just 18 percent today. Employees’ belief that they are treated fairly by senior management has risen from below industry-average levels to a high of 74.5 percent, significantly above the industry norm of 67 percent. Overall job satisfaction has climbed to 91.9 percent, above the industry average of 87 percent.

The key to Crouse’s turnaround has been staff involvement in the process and an emphasis on improving quality at all levels, explains Derrick Suehs, the hospital’s chief quality officer. "We adopted the philosophy that if you do the right thing, the finances will follow," he says.

"Everyone in the organization has accepted this approach, because it resonates with people," says Dr. Paul J. Kronenberg, a veteran physician who has been Crouse’s CEO since 2004.

The new philosophy began to emerge at an off-site corporate retreat in early 2002, when middle and senior management met for a frank, uncensored discussion. Gradually, the attendees realized that to truly fix all of Crouse’s problems, they needed to shift to the more philosophical level of mission, vision and values. The hospital ditched its verbose mission statement and replaced it with 12 simple words: "To provide the best in patient care and to promote community health."

Based upon that mission statement, the attendees also developed a list of six core values for the organization, corresponding to the letters in Crouse’s name: Community —working together; Respect—honor, dignity and trust; Open and honest communication; Undivided commitment to quality; Service to our patients, physicians and ourselves; and Excellence through innovation and creativity.

To help transform those abstract concepts into real change, senior management appointed an 18-member oversight committee consisting of volunteers from middle management and staff. Suehs led the oversight group—which was dubbed the Simply the Best committee—in creating a culture-reinvention process that would help achieve the hospital’s mission. The group has since grown to 25 members.

For structure, Suehs chose the National Institute of Standards and Technology’s Baldrige performance-excellence criteria, a self-auditing process that an organization can use to improve overall performance.

The reinvention process also spawned scores of smaller group-discussion sessions to which employees at every level of the organization were invited to participate. The small groups grappled with how to translate the mission statement and values into specific behaviors that would improve customer service and other aspects of performance. In the first year alone, the small-group process generated more than 900 recommendations. Crouse put the ideas into a project management process, and assigned each one to a member of management who would guide it to fruition. At the end of the first full year, Crouse achieved an 85 percent implementation rate.

In recognition of its success across a range of workforce challenges, Crouse receives the 2008 Optimas Award for General Excellence.

Located in Syracuse, New York, Crouse Hospital has 506 licensed beds. In 2007, the hospital handled 55,000 emergency services visits and discharged 22,971 patients, both tops in the region. The hospital has 2,7000 employees. Last year it had $288 million in revenue and net income of $11 million.

Crouse Hospital is a regional health care facility that focuses on providing a range of services, including trauma, neonatal intensive care and high-risk maternal/obstetrics care, to communities in the Syracuse region. Crouse operates one of the first and largest one-day surgery centers in the nation.